EU Repeal Bill Faces Hellish Passage by Edelman

EU REPEAL BILL FACES HELLISH PASSAGE Edelman 14 July 2017

Lucy Thomas Head of Brexit Advice

Pawel Swidlicki Brexit Analyst

Lucy.Thomas@Edelman.com

Pawel.Swidlicki@Edelman.com

EU REPEAL BILL FACES MYRIAD OF OBSTACLES Yesterday saw the publication of the European Union (Withdrawal) Bill, the bill originally conceived of as the Great Repeal Bill. Described by Brexit Secretary David Davis as “one of the most significant pieces of legislation that has ever passed through Parliament”, the Bill’s key functions are to scrap the 1972 European Communities Act – which gives effect to EU law in the UK – and to transpose a vast swathes of EU legislation directly into UK law so as to provide certainty and continuity for businesses and consumers. Put simply, passing the bill is an absolute requirement for a smooth and orderly Brexit. However, the Government has been given advance notice by the Opposition that it will seek to frustrate the passage of the bill when it comes before the Commons properly in the Autumn (and that’s before it even gets to the Lords). Labour has set six key conditions it must meet while the Liberal Democrats have promised to ‘string it up like a Christmas tree with amendments’, and outgoing leader Tim Farron has warned it will face months of “parliamentary hell”. Meanwhile from the first ministers of Scotland and Wales the warning was clear: unless there are changes to reflect devolved administrations, they would not give their backing. In a rare joint statement, Nicola Sturgeon and Carwyn Jones called the bill a “naked power-grab, an attack on the founding principles of devolution and could destabilise our economies.”

Back in Westminster, as a result of the new parliamentary arithmetic, as few as seven Conservative rebels would be enough to derail its passage, and as we have set out previously, around 1 in 4 Tory MPs back a softer form of Brexit than that set out by Theresa May in her Lancaster House speech. On a practical level, other questions to be answered focus on how the myriad European regulatory bodies, such as Euratom, the European Medicines Agency and others will be replaced, or whether the UK will seek some kind of continued or associate membership. EU law currently refers to all such bodies, so difficult decisions on how a whole range of sectors will in future be regulated are approaching apace. We set out the key flashpoints below: European regulatory bodies There are around 30 EU agencies and regulatory bodies that the UK is a member of which are directly or indirectly related to its single market membership – these deal with the regulation of specific sectors (such food, medicines, banking, chemicals and aviation safety) through to wider issues such as health and safety at work and vocational training. There are also a further 15 or so bodies dealing with EU co-operation in other areas, from policing through to the environment and gender equality. In all of these areas the UK will have to decide what relationship it wants to retain with these bodies, e.g. formal membership, observer status or a clean break, and whether new UK bodies need to be set up or whether existing bodies need to be expanded and given new powers. Much will depend on the closeness of the new UK-EU relationship. For example, in a joint letter to the FT last week, Business Secretary Greg Clark and Health Secretary Jeremy Hunt wrote that “the UK would like to find a way to collaborate with the EU in the context of public health and safety… we will continue to work closely with the European Medicines Agency.”

Another issue that has been prominent in recent days is Euratom, the European Atomic regulator which the UK is also set to leave alongside the EU, and what the UK’s new relationship with it ought to be (although that will be dealt with a dedicated bill rather than the repeal bill). Brexit Secretary David Davis said yesterday hinted the UK could seek associate Euratom membership – as Switzerland enjoys – telling the BBC that “what want is something quite close to what we currently have in terms of safeguards, in terms of agreements, in terms of oversight, in terms of the ability to transfer fissile materials, all these sorts of things.” The bill also creates the ability for the government to create new charges or modify existing fees levied on industry in order to mitigate the new financial burden of setting up/expanding the UK’s standalone regulatory capacity. ‘Henry VIII powers’ and parliamentary scrutiny In view of the sheer scale of the exercise and the limited time available, the Government insists that it requires extraordinary powers enabling ministers to amend both the withdrawal agreement and legislation under so-called Henry VIII powers (owing to their wide scope), which would run for two years beyond Brexit day. The Government’s case is not entirely unreasonable – the most commonly cited examples include the need to replace references to EU law or EU regulatory agencies with references to UK laws and new or existing UK regulatory agencies, and it is simply not practical for parliament to consider each and every case. The Government estimates that between 800 and 1,000 statutory instruments will be required – SIs amend existing laws and as such are subject to far less scrutiny and debate then primary legislation despite on occasion making significant and controversial changes. To put this in context, this is roughly the amount that is generated during the course of normal parliamentary business, so the volume would be double. The Government has promised to exercise these powers in good faith, and not to use them to water down the substance of EU laws or create new powerful, unaccountable bodies. Unsurprisingly, the opposition, NGOs and independent experts are sceptical of being asked to ‘trust the government to do the right thing’. Some critics have already seized on the fact that the explanatory notes to the bill, the government describes the “reciprocal rights of citizens” as a “deficiency” that would need to be “corrected” unless the UK and EU are able to reach a mutual agreement on this point. Therefore, this issue will be at the forefront of opposition to the bill with critics demanding greater parliamentary oversight and control over the process. Ironically, in order to deflect criticism that they are seeking to block Brexit, they will be able to appropriate one of the Leave side’s stronger arguments – namely that Brexit is about the re-empowering of parliament.

14 July 2017

Non-incorporation of EU Charter of Fundamental Rights The government’s justification for leaving the Charter outside of the scope of the bill is that it does not create additional rights, and that is therefore superfluous. However, the real reason is that the Charter has been one of the prime bugbears of the Tory right because of its potential to lead to the establishment of new rights. One recent example is the equalisation of pension entitlements between same-sex and heterosexual couples whether the Supreme Court explicitly refenced the principle of equal treatment before the law enshrined in the Charter. In dropping the Charter the government therefore risks creating the perception it is rolling back UK citizens’ rights – including LGBT rights, a particularly sensitive issue given its arrangement with the DUP – and Labour have made the retention of the charter one of their key demands. Given the totemic nature of this issue within the Tory party, potential rebels may prefer to keep to their powder dry for other conflicts although even a small number could be enough to defeat the government on this point. Insufficient new powers for the devolved administrations The Bill will require the consent of the devolved administrations but Scottish First Minister Nicola Sturgeon and Welsh First Minister Carwyn Jones were quick out of the blocks yesterday in warning that the current form of the bill made this impossible. In a joint statement, the two accused the government of “utterly failing” its own self-imposed test of a “constructive and collaborative approach” towards Brexit, arguing that the Bill does not “protect the interests of all the nations in the UK, safeguard our economies and respect devolution… it is a naked powergrab, an attack on the founding principles of devolution and could destabilise our economies.” They concluded by claiming that the Bill “does not return powers from the EU to the devolved administrations, as promised. It returns them solely to the UK Government and Parliament, and imposes new restrictions on the Scottish Parliament and National Assembly for Wales.” Ultimately, it is hard to see the devolved administrations withholding consent from the final bill given this would result in a legal and constitutional nightmare, which would in turn generate real negative implications for Scotland and Wales. That said, expect the devolved administrations to fully maximise the leverage they do have to extract as many concessions as possible, both in terms the bill itself and in other areas.

WOULD DERAILING THE BILL STOP BREXIT?

Non-incorporation of EU Charter of Fundamental Rights

REACTIONS: WHO HAS SAID WHAT?

In a word, no. Article 50 has been triggered and as Michel Barnier reminded us the other day, the clock is ticking. The only way to stop Brexit would be for the UK to withdraw its notice of withdrawal and for the EU to accept this. Blocking the repeal bill would not stop Brexit, but it would create an almighty legal mess which ultimately would not be in the interests of Tory rebels, the opposition or devolved administrations.

Nicola Sturgeon, First Minister of Scotland and Carwyn Jones, Welsh First Minister:

For this reason, the bill is likely to pass at third reading, albeit in a different form to the one presented by the government yesterday. It is also important to remember that in parallel to the repeal bill, there will be eight bills dealing with areas in which the UK will need to develop independent policies upon leaving the EU – such as customs, trade, immigration, agriculture and fisheries.

“On that basis, the Scottish and Welsh Governments cannot recommend that legislative consent is given to the Bill as it currently stands.”

IS THIS ‘TAKING BACK CONTROL’? The purpose of the repeal bill is to deal with the immediate practical challenges of Brexit, not its longer-term nature. Giving the UK parliament the ability to amend or entirely scrap legislation across a wide range of areas – from environmental law to workers’ rights – was a key attraction for many Brexiteers, and they will be impatient to do so once all the relevant laws have been moved onto the UK statute book. Therefore, the real opportunities for radical change will only present themselves not only post the UK’s formal EU exit in 2019, but also after the transition period during which EU law in its current form will most likely continue to apply. However, there are two things to bear in mind – firstly, many of these laws could be locked into place by the terms of the new UK-EU FTA; the EU will insist on the maintenance of its standards as the price for continued access to the single market.

“The European Union (Withdrawal) Bill does not return powers from the EU to the devolved administrations, as promised. It returns them solely to the UK Government and Parliament, and imposes new restrictions on the Scottish Parliament and National Assembly for Wales.

Sir Kier Starmer MP, Shadow Brexit Secretary: Labour demanded concessions in six areas including: •

Ensuring that workers’ rights in Britain do not fall behind those in the EU

•

Incorporating the European Charter of Fundamental Rights into UK law

•

Limiting the scope of so-called ‘Henry VIII powers’, which could allow the government to alter legislation with minimal parliamentary scrutiny.

“We have very serious issues with the government’s approach, and unless the government addresses those issues, we will not be supporting the bill…. These issues are serious, they’re reasonable and we’re very firm about them. So we’re really putting the government on notice” Tim Farron MP, outgoing Lib Dem Leader: "The Government cannot use the Great Repeal Bill to get their way… If you found the Article 50 Bill difficult, you should be under no illusion, this will be hell. If the Government try any wheeze or trick to force through changes to vital protections, from workers' rights to the environment, they are playing with fire. I am keen to work across party lines to do everything we can to protect these rights.”

Secondly, bringing these laws back into the orbit of the UK parliament will not necessarily lead to fewer burdens of business as many more economically liberal Brexiteers assume – in the current political climate it is just as feasible that UK MPs could amend EU-derived laws to impose additional regulatory burdens as scrapping them.

14 July 2017